The credit rating agency Fitch Ratings has decided to downgrade the rating as a long-term issuer of British Airways, down to ‘BB +’ due to the impact of the Covid-19 coronavirus on passenger air traffic, while maintaining the company’s perspective is ‘negative’.
The risk rating agency explained that the reduction reflects the prospects for a global recession in 2020 and the forecast of a decrease in air traffic, which will weaken the airline’s financial metrics.
«With a deep global recession by 2020 … affecting demand for air travel beyond the restrictions related to the coronavirus pandemic, we believe that the capacity (seats per kilometer offered) of British Airways will only recover its levels of 2019 throughout 2023, leaving its profit margins and credit metrics weak for the previous rating level, «Fitch chief analyst for the airline Hugh Shim explained.
Thus, the agency estimates that the airline’s capacity will close 2020 59% below the 2019 data. In 2021 and 2022 it will still be 22% and 5% below, respectively.